West Bank faces economic breakdown due to occupation

A new report warns that the West Bank’s economy is close to collapse, as Israeli restrictions on movement, land access, and revenue severely undermine Palestinian economic life under military occupation.

The International Crisis Group said today that Israeli measures were “not only crippling the Palestinian economy but also fuelling deep instability,” adding: “The economic conditions necessary for any Palestinian future other than permanent subjugation are being dismantled,” News.Az reports, citing Morning Star.

There is around 30 per cent unemployment among the roughly 3.4 million Palestinians in the West Bank.

After October 7 2023 Hamas-led attack, Israel revoked the work permits of nearly 200,000 Palestinians, depriving the Palestinian economy of almost $400 million (£298m) a month — nearly a quarter of its overall output.

Private companies have seen an estimated 50 per cent decline in business.

Israel has also withheld billions in tax revenue owed to the Palestinian Authority, with no transfers made since May 2025, leaving public-sector workers unpaid and infrastructure crumbling.

International Crisis Group special adviser Joost Hiltermann said world attention on Gaza had obscured the West Bank’s deterioration, warning of “wider consequences for Palestinians’ future aspirations.”

News.Az 

By Ulviyya Salmanli